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###### Department of Agriculture

###### Agricultural Marketing Service 

          - 7 CFR Part 981 
          - [Docket No. AMS-FV-07-0051; FV07-981-2 FR]

# AGENCY:

Agricultural Marketing Service, USDA. 

# ACTION:

Final rule. 

# SUMMARY:

                        This rule revises the requirements for interhandler transfers of almonds under the administrative rules and regulations of the California almond marketing order (order). The order regulates the handling of almonds grown in California and is administered locally by the Almond Board of California (Board). This rule requires handlers who transfer almonds to other handlers to report to the Board whether or not the almonds were treated to achieve a 4-log reduction in                         *Salmonella*                         bacteria (                        *Salmonella*). This action will help the Board track treated and untreated almonds and facilitate administration of its mandatory                         *Salmonella*                         treatment program.                     

# DATES:

*Effective Date:*                         September 13, 2007.                     

# FOR FURTHER INFORMATION CONTACT:

                        Maureen T. Pello, Assistant Regional Manager, or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, Telephone: (559) 487-5901, Fax: (559) 487-5906, or E-mail:                         *Maureen.Pello@usda.gov,*                         or                         *Kurt.Kimmel@usda.gov.*

                        Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone: (202) 720-2491, Fax: (202) 720-8938, or E-mail:                         *Jay.Guerber@usda.gov.*

# SUPPLEMENTARY INFORMATION:

This final rule is issued under Marketing Order No. 981, as amended (7 CFR part 981), regulating the handling of almonds grown in California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” 

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866. 

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This final rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. 

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. 

                    This final rule revises the requirements for interhandler transfers of almonds under the administrative rules and regulations of the order. This rule require handlers who transfer almonds to other handlers to report to the Board whether or not the almonds were treated to achieve a 4-log reduction in                     *Salmonella.*                     A mandatory treatment program to reduce the potential for                     *Salmonella*                     in almonds took effect in September 2007. This action will enable the Board to track treated and untreated almonds and help facilitate administration of its mandatory treatment program. This action was unanimously recommended by the Board at a meeting on March 28, 2007.                 

                    Section 981.55 of the order provides authority for handlers to, upon notice to and under supervision of the Board,                           ( print page 51991)                        transfer almonds to another handler. Marketing order obligations regarding volume regulation, when in effect, and assessments must be fully met and may be divided between the participating handlers. Section 981.455 requires handlers to report to the Board on ABC Form No. 7, “Interhandler Transfer of Almonds,” information regarding interhandler transfers. Paragraph (a) of that section currently requires the following information: (1) Date of transfer; (2) the names and plant locations of both the transferring and receiving handlers; (3) the variety of almonds transferred; (4) whether the almonds are shelled or unshelled; and (5) the name of the handler assuming reserve and assessment obligations on the almonds transferred.                 

                    In August 2006, the Board recommended a mandatory treatment program to reduce the potential for                     *Salmonella*                     in almonds. USDA engaged in informal rulemaking to implement the program. A final rule was published on March 30, 2007 (61 FR 15021). Beginning in September 2007, handlers must subject their almonds to a process that achieves a 4-log reduction in                     *Salmonella*                     prior to shipment. The program exempts untreated almonds that are shipped to manufacturers in the U.S., Canada, and Mexico who agree to treat the almonds and untreated almonds that are shipped outside the U.S., Canada, and Mexico.                 

                    To help track treated and untreated almonds, the Board met in March 2007 and recommended revising the order's administrative rules and regulations to require handlers to report to the Board whether or not almonds transferred to other handlers were treated under the mandatory treatment program. Handlers must include an identification number for each lot transferred. This number may be a contract number or other unique handler number that can identify the lot. Under the mandatory                     *Salmonella*                     treatment program, handler records must provide the ability to differentiate treated from untreated almonds (§ 981.442(b)(5)). Requiring handlers to provide lot identification numbers on their interhandler transfer forms complements this requirement. These changes to the interhandler transfer requirements will help facilitate administration of the mandatory                     *Salmonella*                     treatment program. Paragraph (a) in § 981.455 is revised accordingly.                 

## Final Regulatory Flexibility Analysis 

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis. 

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. 

There are approximately 6,000 producers of almonds in the production area and approximately 110 handlers subject to regulation under the marketing order. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $6,500,000. 

Data for the most recently completed crop year indicate that about 52 percent of the handlers shipped under $6,500,000 worth of almonds. Dividing the average almond crop values for 2003-04, 2004-05, and 2005-06 as reported by the National Agricultural Statistics Service ($2.105 billion) by the number of producers (6,000) yields an average annual producer revenue estimate of about $350,000. Based on the foregoing, about half of the handlers and a majority of almond producers may be classified as small entities. 

                    This rule revises § 981.455(a) of the order's administrative rules and regulations to require handlers who transfer almonds to other handlers to report to the Board whether or not the almonds were treated to achieve a 4-log reduction in                     *Salmonella*. A mandatory treatment program to reduce the potential for                     *Salmonella*                     in almonds took effect in September 2007. This action will help the Board track treated and untreated almonds and help ensure the integrity of its mandatory program. Authority for this change is provided in §§ 981.55 of the order.                 

                    Regarding the impact of this action on affected entities, it merely requires handlers who transfer almonds to other handlers to indicate on ABC Form No. 7, “Interhandler Transfer of Almonds,” whether or not the almonds were treated to achieve a 4-log reduction in                     *Salmonella*. Handlers must also include a lot identification number for each lot transferred.                 

                    Regarding alternatives to this action, the Board considered not requiring handlers to report whether their transferred almonds were treated to achieve a 4-log reduction in                     *Salmonella*. However, this would not allow the Board to track treated and untreated almonds. Thus, the Board unanimously recommended revising the requirements regarding interhandler transfers of almonds.                 

                    This action slightly modifies the reporting requirements for all California almond handlers. All handlers must currently report their interhandler transfers to the Board on ABC Form No. 7, “Interhandler Transfer of Almonds.” This form had been approved by the Office of Management and Budget (OMB) under OMB No. 0581-0178, Vegetable and Specialty Crops. This rule requires that two extra columns be added to this form. One column allows handlers to indicate whether or not the transferred almonds were treated to achieve a 4-log reduction in                     *Salmonella*. The second column provides for inclusion of a lot identification number for tracking purposes. In accordance with the Paperwork Reduction Act (44 U.S.C. Chapter 35), the revised form has been submitted to the OMB for approval. Once approved, this information collection will be merged into OMB No. 0581-0178. It is estimated that it will take a handler about 0.5 hour per response, and that 50 handlers will respond and submit the form five times per year. Thus, the total annual reporting burden for the form is estimated at 125 hours per year.                 

AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. 

USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by the industry and public sector agencies. 

Additionally, the meetings were widely publicized throughout the California almond industry and all interested persons were invited to attend the meetings and participate in deliberations on all issues. The Board's Food Quality and Safety Committee discussed this issue on January 30, 2007. The committee recommended the change to the Board on March 28, 2007. Both of these meetings were public meetings and all entities, both large and small, were able to express views on this issue. 

                    A proposed rule concerning this action was published in the                     **Federal Register**                     on June 8, 2007 (72 FR 31759).                           ( print page 51992)                        Copies of the rule were also mailed or sent via facsimile to all almond handlers. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 60-day comment period ending August 7, 2007, was provided for interested persons to respond to the proposal.                 

One comment was received during the comment period in response to the proposal. The commenter asked if the same rules and safeguards apply to almonds imported from other countries. Almonds are not listed in section 8e of Act. Thus, imported almonds are not subject to comparable quality requirements as those in effect for the domestic commodity. 

Accordingly, no changes will be made to the rule as proposed, based on the comment received. 

                    A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:                     *http://www.ams.usda.gov/​fv/​moab.html*. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the                     **FOR FURTHER INFORMATION CONTACT**                     section.                 

After consideration of all relevant matters presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act. 

                    It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the                     **Federal Register**                     (5 U.S.C. 553) because mandatory compliance with the                     *Salmonella*                     treatment program began September 1, 2007, and this rule should be in place as soon as possible so the Board can track treated and untreated almonds. Further, handlers are aware of this action, which was unanimously recommended at a public meeting. Also, a 60-day comment period was provided for in the proposed rule, and the comment received was addressed herein.                 

# List of Subjects in 7 CFR Part 981

      - Almonds
      - Marketing agreements
      - Nuts
      - Reporting and recordkeeping requirements

For the reasons set forth in the preamble, 7 CFR part 981 is amended as follows:

# PART 981—ALMONDS GROWN IN CALIFORNIA 

1. The authority citation for 7 CFR part 981 continues to read as follows: 

Authority:7 U.S.C. 601-674. 

2. Section 981.455 is amended by revising paragraph (a) to read as follows: 

§ 981.455 

                            (a)                             *Transfers of almonds.*                             Interhandler transfers of almonds pursuant to § 981.55 shall be reported to the Board on ABC Form 7. The report shall contain the following information:                         

(1) Date of transfer; 

(2) The names, and plant locations of both the transferring and receiving handlers; 

(3) The variety of almonds transferred; 

(4) Whether the almonds are shelled or unshelled; 

(5) The name of the handler assuming reserve and assessment obligations on the almonds transferred; 

                            (6) Whether the almonds had been treated to achieve a 4-log reduction in                             *Salmonella*                             bacteria, pursuant to § 981.442(b); and                         

(7) A unique handler identification number for each lot. 

* * * * *

Dated: September 7, 2007. 

Lloyd C. Day, 

Administrator, Agricultural Marketing Service. 

[FR Doc. 07-4490 Filed 9-10-07; 10:05 am] 

BILLING CODE 3410-02-P